Judge Puts the Kybosh on Internet Scheme

OAKLAND (CN) – A federal judge Monday froze the assets of a company the SEC accused of running a $130 million pyramid scheme in Internet ads. U.S. District Judge Richard Seeborg granted the SEC request for a preliminary injunction against California-based eAdGear and its Hong Kong affiliate eAdGear Holdings limited. The order also freezes the assets of defendants CEO Charles Wang, his wife Cathy Zhang, CFO Francis Yuen, and Yuen’s wife, relief defendant Laurata Chan. Seeborg also wants an accounting, preservation of documents, and repatriation of assets. The SEC sued the defendants in September, claiming they were running a Ponzi scheme targeting investors, many of them Chinese. eAdGear claimed to use search engine optimization to boost clients’ rankings on the Internet. The SEC said the four individual defendants used investors’ money to fill their personal bank accounts with more than $1 million, and to buy property in California and New Jersey.